Prices of top-shelf municipal bonds were flat at mid-session, according to traders, as the market awaited the decision by the Federal Reserve on whether to raise interest rates. There were no major deals slated for pricing on Thursday or Friday.
The Federal Open Market Committee winds up its two-day meeting and will release its decision statement Thursday afternoon, followed by a press conference with Fed Chair Janet Yellen.
Secondary Trading
The yield on the 10-year benchmark muni general obligation was steady from 2.26% on Wednesday, while the yield on the 30-year GO was unchanged from 3.25%, according to a read of Municipal Market Data's triple-A scale.
Treasury prices were slightly higher on Thursday, with the yield on the two-year Treasury note slipping to 0.79% from 0.80% on Wednesday, while the 10-year yield dropped to 2.28% from 2.29% and the 30-year yield decreased to 3.07% from 3.08%.
The 10-year muni to Treasury ratio was calculated on Wednesday at 98.1% versus 102.3% on Tuesday, while the 30-year muni to Treasury ratio stood at 105.1% compared to 106.0%, according to MMD.
Tax-Exempt Money Market Funds Saw Outflows
Tax-exempt money market funds experienced outflows of $1.87 billion, bringing total net assets to $247.05 billion in the period ended Sept. 14, according to The Money Fund Report, a service of iMoneyNet.com. This followed an inflow of $2.23 billion to $248.92 billion in the previous week.
The average, seven-day simple yield for the 377 weekly reporting tax-exempt funds remained at 0.01% for the 124th straight week.
The total net assets of the 949 weekly reporting taxable money funds fell $3.96 billion to $2.423 trillion in the period ended Sept. 15, after experiencing an outflow of $13.42 billion to $2.427 trillion the previous week.
The average, seven-day simple yield for the taxable money funds remained at 0.02% for the 35th week in a row.
Overall, the combined total net assets of the 1,326 weekly reporting money funds decreased $5.83 billion to $2.670 trillion in the period ended Sept. 15, which followed an outflow of $11.19 billion to $2.675 trillion the week before.
Primary Market
Barclays Capital markets received the official award on the Illinois Finance Authority’s $368.15 million of Series 2015A revenue bonds for the OSF Healthcare System.
The bonds were priced to yield from 1.18% with a 4% coupon in 2017 to 4.10% with a 5% coupon in 2035; a 2037 maturity was priced as 4 1/8s to yield approximately 4.373% and a 2045 maturity was priced as 5s to yield 4.33%.
The issue was rated A2 by Moody’s Investors Service, and A by Standard & Poor’s and Fitch Ratings.
MSRB Previous Session's Activity
The Municipal Securities Rulemaking Board reported 39,234 trades on Wednesday on volume of $7.577 billion.
Bond Buyer Visible Supply
The Bond Buyer's 30-day visible supply calendar fell $2.48 billion to $6.47 billion on Thursday. The total is comprised of $2.81 billion competitive sales and $3.65 billion of negotiated deals.
